Carl Icahn Boosts Stake in Herbalife Again

Carl Icahn has just increased creased his stake in Herbalife Ltd. (NYSE:HLF) according to a filing with the SEC. According to the 13D filing on Herbalife (NYSE: HLF), Carl Icahn now owns 16.48 percent, or 16,966,485 shares, in the MLM company. This number is an increase of approximately 6 percent from the 16,032,415 shares which Icahn held at the end of the first quarter of 2013.

Bill Ackman vs. Carl Icahn

Given Q1 offered the first full quarterly look at US trends amid the heightened investor scrutiny and media storm, these results were of a higher importance than usual. We anticipated some softening in the US as we don’t believe the domestic Herbalife distributor base is fully insulated from the Wall Street controversy that is playing out very publicly. The Q1 US results confirmed softer growth, but the pressure is largely self-inflicted as Herbalife began to rein in online lead generation sales and a distributor group left in December as a result. US revenue and volume point growth were adversely impacted by an estimated 300 basis points due to the departure/curtailment of online lead-generation-based distributors (a positive long-term move).

Average active US sales leader growth of 9.2% suggests leading metrics remain relatively healthy, particularly against last year’s 20+% US volume growth. Management indicated that US trends accelerated moving through the quarter and continued the pattern into April. We continue to forecast tempered growth in the remainder of the year despite this April data point as we find the media scrutiny unpredictable.